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SDI forecasts higher earnings for 3d qtr.

Keywords: Tags  steel, Steel Dynamics, SDI, sheet, long products, earnings guidance, OmniSource, Catherine Ngai

NEW YORK — Steel Dynamics Inc. (SDI) expects higher earnings in the third quarter marked by increased margins in its sheet division, higher volumes in its long products sector and strong end markets, the company said Sept. 17.

The Fort Wayne, Ind.-based producer issued a third-quarter earnings guidance of 21 to 26 cents per diluted share compared with second-quarter earnings of 13 cents per diluted share and 6 cents per diluted share in the same period last year.

An increase in overall shipments and average metal spread are expected to boost profitability in the quarter, SDI said.

"Increased profitability from the company’s sheet operations is related to both higher volume and metal spread," the company said. "Increased profitability from the long products operations is expected to benefit from higher volume, more than offsetting metal spread declines caused by decreased product pricing."

SDI continued to underscore the strength in the automotive and manufacturing markets, adding that improvement in the residential construction market has led to positive growth for the company’s painted and Galvalume sheet products.

While the nonresidential construction market has yet to see the same type of growth, a "cautiously optimistic yet favorable outlook" for the sector is supported by gradual improvement in construction-related steel product orders. This includes structural steel and fabricated joist and decking products, which should help SDI’s fabrication operations in the quarter.

However, SDI expects lower third-quarter results at its OmniSource Corp. subsidiary as increases in ferrous and nonferrous scrap shipments are expected to be offset by decreased ferrous scrap margins. It also anticipates losses at its Minnesota operations.

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